Glu Mobile, Inc.Q1 2009 Earnings Call Transcript

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2009-05-06 17:55:21.0

Tags: Tail, Call Transcript, Earnings, Advertising & Promotion, Games, Operational Accounting, Marketing, Personal Technology, Finance, Seeking Alpha, Glu Mobile Inc.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Tavis McCourt.

Justin Patterson - Morgan, Keegan & Company

Thanks guys this is Justin Patterson in for Tavis today. Just a couple quick questions. First a housekeeping item. Could you repeat what CapEx was for the quarter?

Eric Ludwig

Yes, CapEx was $305,000.

Justin Patterson - Morgan, Keegan & Company

Okay, great, thank you. Then just moving on to some other the next generation platforms. It sounds like this is still kind of a immaterial revenue contribution for you guys but just off of the initial economics of what you have seen, can you perhaps just give us a sense of what kind of the tail of the games are here, I mean at least looking at your fairly long tail for some of your catalogue games. So, I'm wondering how that really compares on say a platform like iPhone where you have much more competition on the platform.

Greg Ballard

I'll take that initially. This is Greg speaking. So, that's a very good question. I think to a very large extent right now people are trying to understand that tail themselves. Initially, it would appear though the tail on the iPhone is much shorter tail, much more like a traditional entertainment business, where a title becomes a hit fairly quickly, although a little bit slower than perhaps in a movie or music setting, but, then also fairly rapidly declines.

That has not been the experience of course with the carrier business, and we would hope that there would be some ways of extending that tail. Nonetheless, while it is a hit, the number of downloads, and I think to some extent, the number of the dollars that can be earned on this is still fairly significant for a good hit title at a high price.

One thing I would add is that on the iPhone, Apple has now introduced in 3.0 the possibility of many transactions that could be carried on over the life of a title, so that people can continue to be engaged and buy either upgrades or power-ups or new levels to the title, and no one yet understands exactly how that will affect either the economics of the business or the tails of the products on the business.

They also are going to enable subscription, which could have to the affect of increasing the tail, which to some extent has been the secret of tails being longer in the carrier business as well. So, I would say today the tails is short, tomorrow as the new platform items are rolled out, we could find that to be quite different.

 

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